Dear LHI residents,

We are writing with a brief update on the marine freight service to Lord Howe Island.

After lengthy discussions with Birdon, we are pleased to advise that an in-principle agreement has been reached for a two-year extension of the Birdon marine freight service. The Island Trader will continue to operate between Port Macquarie and Lord Howe Island from the end of March 2025 until the end of March 2027. This is important in providing certainty for island residents.

During the period of this extension, a new vessel will be commissioned for Lord Howe Island. 

We will be working with Birdon over the next two weeks to finalise a contract that will give effect to our in-principle agreement. The terms of the contract are commercial in confidence. However, as you may appreciate, costs related to the Island Trader and the provision of the service by Birdon have increased significantly. 

We have made every effort to limit the impact of these cost increases on residents and businesses. For example, a significant proportion of the cost increases will be absorbed by the LHIB budget (which will require savings elsewhere). Unfortunately, there will also be an increase in freight charges of up to 17.5% in the first year of the extension, with any increase in the second year capped at CPI. We recognize that this increase over the next two years is significant. While we have done everything we can to limit the impact on residents, the new freight charges reflect costs which are unfortunately beyond our control.

During the extension period, there will be a minimum of 24 voyages per annum, with the schedule to be agreed upon with the LHIB.

In summary, the two-year extension is important as it will provide certainty for residents and ensure a consistent, regular service. Unfortunately, costs have increased and this will be reflected in an increase in freight charges.

We will keep you informed on the progress of commissioning a new vessel.

If you have any questions, please contact LHIB on 02 6563 2066.

Please stay safe during the challenging weather conditions this week.
 

Yours sincerely,

Atticus Fleming

Chairperson

Robert Jeremy

Deputy Chairperson